Facebook to Advertisers: Users Don’t Have to Click for It to Pay Off

    October 6, 2012
    Josh Wolford

“It is the delivery of the marketing message to the right consumer, not the click, that creates real value for brand advertisers.”

And with that, Facebook has a new strategy when it comes to convincing marketers that their ad dollars are well spent on the network. As long as the user sees your ad, they’ll want to buy your product or service. It doesn’t matter if they click, so you should really stop worrying about that metric at all.

Facebook isn’t just telling marketers all of this out of the blue – this comes straight out of a study conducted with new partners Datalogix. The study looked at over 50 digital campaigns and attempted to connect exposure to an ad on Facebook with in-store purchases of said products.

From a privacy standpoint, do you think that Facebook’s partnership with Datalogix is anything to worry about? As a marketer, do you think Facebook is right in moving away from the click as a metric of success? Let us know what you think in the comments.

The name Datalogix may ring a bell, and that’s because their partnership with Facebook has raised some eyebrows over the last week. Datalogix is the owner of a massive database of consumer purchasing data. That data, when matched with Facebook data on ad impressions, can give marketers a general picture on whether or not their ad dollars are being spent on ads the directly lead to in-store purchases.

And that partnership with Datalogix has turned into a way for Facebook to tout their advertising clout with marketers.

Here’s what Facebook’s Measurement and Insights head Brad Smallwood had to say about the study in a studio blog post:

Impressions create value. 99 percent of sales generated from online branding ad campaigns were from people that saw, but did not interact with, ads— proof that it is the delivery of the marketing message to the right consumer, not the click, that creates real value for brand advertisers.

Reach drives revenue for online brand marketers. This is a concept very familiar to TV marketers, who often start with a reach objective—but until now hadn’t been proven for online. When applied to digital brand campaigns, the study demonstrated that campaigns that maximized reach had on average a 70 percent higher return-on-investment.

Finding the right message frequency is key. The study revealed that for online brand campaigns, if you reallocated high frequency impressions to people seeing too few impressions, you would see a 40 percent increase in ROI with the same budget. What this means is that for every online campaign there is a “sweetspot” of effective frequency that maximizes return on investment, and that the DataLogix tool can help marketers empirically isolate that sweetspot for each brand and campaign.

It’s not like there haven’t been positive signs for marketers when it comes to clicks on the network – especially with Sponsored Stories in the mobile news feed. But Facebook has had to deal with some very public votes of no confidence in their platform as a reliable source for ad spend, including the bombshell GM dropped when they yanked all ads just days before Facebook’s big IPO. And many marketers are skeptical that spending money on Facebook is even worth it. Why not just operate a page – that’s free branding, right?

It is worth it, according to Facebook, and they can prove it. Their strategy now relies on the notion that digital marketing is shifting its focus from the click to this more typical metric of measuring ad success. According to them, the Datalogix/Facebook tool is a huge step forward in measuring real return on investment for online advertisers.

Of course, this sort of data mining isn’t without its detractors. Two online privacy groups have already asked the FTC to investigate whether or not the partnership with Datalogix violates a previous order from the commission, where Facebook pledged to make “clear and prominent” disclosure of any sharing of nonpublic user information.

Here’s where the privacy groups feel Facebook may have faltered:

The Commission should investigate whether Facebook has violated Parts I and II of the Consent Order. Facebook did not attempt to notify users of its decision to disclose user information to Datalogix. Neither Facebook’s Data Use Policy nor its Statement of Rights and Responsibilities adequately explains the specific types of information Facebook discloses, the manner in which the disclosure occurs, or the identities of the third parties receiving the information.

In fact, Facebook only mentions Datalogix once – at the bottom of the “Interacting with Ads” page. This page requires at least five actions to reach from the Facebook.com home page and simply directs users to the Datalogix privacy policy. The Consent Order’s prohibition on misrepresentations includes misrepresentations by omission. Thus, the Commission should determine whether Facebook’s failure to notify users of the disclosure of user information to Datalogix violates the consent order.

Facebook felt compelled to explain their purchase tracking initiative in a post to their privacy page. In it, they emphasize that all dat remains anonymous on their end and on Datalogix’s end:

“Importantly, we have designed this process with privacy at the forefront. We compare hashes of some Facebook data with hashes provided to us by Datalogix. Once we compare, we are able to send corresponding data on the reach of large-scale ad campaigns, which Datalogix uses to create aggregate reports comparing product purchases by large groups of people who did or did not see an ad.

Because of our commitment to privacy, we had an industry-leading auditing firm evaluate the privacy implications of this process. The auditor confirmed that, throughout this process, Datalogix is not allowed to learn more about you from Facebook profile information. Similarly, Datalogix does not send us any of their purchase data, meaning we cannot specifically tell whether or not you purchased a marketer’s product. Finally, with this partnership, Datalogix only sends the marketer aggregate information about large groups of people. None of this data is attributable to an individual Facebook user,” said the company.

Going forward, Facebook will continue to use this tool to show marketers that their money has legs on the Facebook platform. It’ll be up to marketers to decide whether or not digital strategies must move beyond the click.

Do you think that Facebook’s assertion that branding and impressions are the proper metric, not clicks, holds water? As a marketer, would you be more inclined to purchase ads on the network if Facebook could prove that they generated real-world sales? Let us know what you think in the comments.


Josh Wolford
Josh Wolford is a writer for WebProNews. He likes beer, Japanese food, and movies that make him feel weird afterward. Mostly beer. Follow him on Twitter: @joshgwolf Instagram: @joshgwolf Google+: Joshua Wolford StumbleUpon: joshgwolf